The United States held talks in Geneva this week with a group of mainly
developing countries on how to address the issue of biotechnology in the
new doha round of global trade talks.

European Policy News

US Trade Representative Robert Zoellick said on Monday that he had met
with representatives from African countries, the Mercosur group (Argentina,
Brazil, Paraguay and Uruguay) and the 18-member Cairns Group of agricultural
exporting nations to sound out their views concerning biotechnology trade.
Biotechnology "is extremely important in dealing with problems ranging
from the hundred million African children who are malnourished to extreme
possibilities for benefits in terms of growing food with fewer fertilisers
and pesticides," Zoellick told reporters. "So this is a topic I want to
try to take the counsel of others on."

Action against EU The United States has signalled it wants to use the
Doha round talks on agriculture to rally support from other members of
the World Trade Organisation, particularly developing countries, against
what it sees as unjustified restrictions on trade in genetically modified
foods, particularly in Europe. US officials are upset with the EU over
its continued reluctance to lift a moratorium on new GMO approvals, as
well as its draft regulations on the labelling and traceability of products
containing GMOs unveiled last July. "We've been very patient with that,"
Zoellick said in reference to the GMO moratorium. "But then even on top
of that, the Europeans want to put an additional regulation on top of products
that are approved as safe and healthy."

TNC to launch new round Meanwhile, the first meeting of the Trade Negotiating
Committee (TNC) - the body which will have overall control of the new Doha
round - is to take place next Monday (January 28). WTO members are expected
to approve at that meeting the creation of five negotiating groups to deal
with sectoral talks on agriculture, services, industrial tariffs, WTO rules
and the environment. Stuart Harbinson, Hong Kong's top representative in
Geneva and current chair of the WTO's General Council, is tipped to head
the agriculture group.

North-South split

However, there are reported to be splits, largely on North-South lines,
on the question of whether the TNC should be autonomous or subordinate
to the WTO's ruling General Council. Richer countries are anxious that
the negotiating process should be as streamlined as possible. But negotiators
from developing countries are more cautious about the structure of the
negotiations. "We must have a structure in which we can have confidence
and that ensures that the big four don't steer things to their benefit,"
said one diplomat. "We can't start negotiations until we are all happy."

***

2. GM concern could mar US wheat sales to Egypt [shortened]

SHARM EL-SHEIKH

Egypt, Feb 9 (Reuters) -

U.S. wheat sales to Egypt could face pressure from concerns over genetically-modified
(GM) wheat and the high price of the dollar, industry experts said at a
conference to promote U.S. wheat on Saturday. "It's definitely become an
issue in the Middle East. People just don't want it (GM wheat)," said David
Payne, director of Louis Dreyfus Negoce. He said U.S. wheat officials had
heard similar fears from end-users during recent promotion drives in the
Far East. "Growers in Colorado and Oklahoma are telling farmers to stay
away from it," he told Reuters. The United States is one of the world's
largest wheat exporters, though U.S. wheat officials say two thirds of
it is consumed in the United States, where concerns about genetically-
modified food are not as high as in Europe and other parts of the world.

Egypt has been one of the world's largest importers of U.S. wheat in
recent years, importing 3.5 million in marketing year 2000-2001. U.S. wheat
competes with French, Australian and Canadian wheat for Egyptian government
tenders, but private sector millers - who account for around one million
tonnes of imports a year ­ are increasingly turning to cheap alternatives
with lower freight costs, traders say. Eldon Lawless, board member of the
U.S. Wheat Associates group which is organising the two-day regional conference,
said GM wheat would come into the market by 2004 at the earliest. Egyptian
millers sought assurances that GM wheat would not find its way into Middle
East cargoes. "If you have one grain in a thousand which is genetically
modified, the consumer is going to refuse it," one said in a panel discussion.
"There's not enough information to put my mind at ease. I hoped I'd hear
something today to make me feel comfortable, but I didn't," another told
the seminar. Industry figures said the weakness of the Egyptian pound could
also damage U.S. wheat sales... "Millers don't want U.S. wheat at the moment,
over the last two months or so." Egypt's main buyer, the state-owned General
Authority for Supply Commodities (GASC), has been able to maintain high
buying levels of U.S. wheat through credit facilities offered through U.S.
aid programmes to Egypt.

***

3. TRADE: BIOTECH FIRMS GIRD FOR CHINA FIGHT

Inter Press Service
By Danielle Knight
WASHINGTON, Feb. 8

The biotechnology industry has threatened possible legal action against
China if the world's most populous country does not back away from barring
genetically modified organisms (GMOs). The American Soybean Association
(ASA) has said it is confident China ­ the world's largest importer
of soybeans -- eventually will give in to pressure from U.S. officials,
who have been in Beijing this week seeking clarity on trade restrictions
proposed by the government there.

Nevertheless, at least two firms have hired a lawyer to plot strategy
in the event China implements its restrictions starting Mar. 20, as it
has proposed. William DiSalvatore, a partner in the New York law firm Hale
and Dorr, told the Reuters news agency his clients -- a U.S. and a European
biotechnology firm that have yet to be identified by name -- "will consider
some form of action if the rules are implemented." He did not elaborate.
Various biotechnology companies contacted by IPS --including industry leaders
Monsanto, Novartis, and Aventis -- declined or were unavailable to comment
on DiSalvatore's remarks. In January, Beijing announced the long-awaited
details of its controversial rules on genetically modified food, which
appear to be stricter than those adopted by the United States. U.S. industry
and government officials have complained that China's new regulations on
imports of biotech foods were so restrictive that they would threatened
$ 1 billion in annual sales of U.S. soybeans, about 70 percent of which
are genetically modified. The regulations require that all GMO imports
be labelled. Exporters must also apply for safety certificates -- which
could take up to 270 days to obtain ­ stating that the goods are harmless
to humans, animals and the environment. Tang Yangli, a senior expert at
the Ministry of Agriculture Information Center, said the new rules were
likely to delay any imports of GMOs. "It will cost traders more and take
them longer to get GMO products labelled, obtain safety certificates, approval
documents and pay quarantine fees," she said. U.S. officials have argued
the proposed rules were really an effort by China to protect its domestic
soybean market. Chinese agricultural officials have stated their concern
that soybean imports exceeded domestic production for the first time last
year, a trend that could accelerate with China's entry into the World Trade
Organization (WTO). China's imports of soybeans have skyrocketed in recent
years, from less than 2.5 million tons per year in the early 1990s to more
than 10 million tons in 2000, half of which came from the United States,
according to industry and official statistics. China purchased $ 1.28 billion
of soybeans last year ­ triple the amount it bought in 1999 -- and
is the largest buyer of U.S. soybeans and soy products, according to the
ASA.

During this week's talks in Beijing, Chinese Agriculture Minister Du
Qinglin said his country still planned to implement its GMO rules Mar.
20. The U.S. soybean industry said, however, it was confident the United
States would eventually compel China to loosen the restrictions. "Ultimately,
I think pressure from our government and pressure from their own (soybean
companies) will force them to open their import door again," said Phil
Laney, China director for the ASA. It was unclear whether GMOs would be
on the agenda when President George W. Bush visits China Feb. 21. Critics
of biotechnology have long accused the United States and other agricultural
exporting nations, including Argentina, of bullying less powerful nations
that have prohibited or proposed to prohibit the import of GMOs. Bolivia,
Croatia, Sri Lanka and Thailand, which adopted or proposed to adopt strict
rules on biologically engineered products, have been facing heightened
pressure for the last two years to drop any bans or proposed restrictions
on the import of products derived from modified crops, according to environmentalists
in those countries. The United States and Argentina have argued that rules
restricting imports of GMOs violate trade law under the WTO. U.S. officials
said the existing regulatory framework and monitoring policies were adequate
to ensure that GMO products were safe for human and animal consumption.
Early in 2001, the government of Sri Lanka drafted a ban on GMOs in their
country that was supposed to enter into force in September. The ban has
been deferred indefinitely, however, due to pressure from the United States,
according to Larry Bohlen, director of health and environment programs
at Friends of the Earth U.S. "The U.S. government's promotion of genetically
modified organisms is so aggressive that it is working to overturn other
countries' laws," he said.